CRUDE intraday&weekly outlook

Crude Oil : Extends gains tracking NYMEX
30 June 2008 10:27:14



Oil prices recorded a fresh high on Friday, as comments from the OPEC President and a threat from Libya to cut its crude output worsened the supply worries.



Crude oil August in NYMEX settled at $140.54 on Friday, after touching an all-time high of $142.99 a barrel.



Chakib Khelil, president of the Organization of the Petroleum Exporting Countries, said he believes oil prices could rise to between $150 and $170 a barrel this summer.



Libya's most senior oil official Shokri Ghanem said that he was studying the possibility of reducing production in response to a bill before the US Congress that would empower the Justice Department to sue members of the Organization of Petroleum Exporting Countries for limiting oil supplies.



On Wednesday, the US Energy Department's Energy Information Administration had reported the first weekly rise in US crude supply in six weeks. According to the EIA, US crude supplies climbed by 800,000 barrels to 301.8 million for the week ended June 20.



Short-term supply concerns due to geo-political tensions in the Middle East and Nigeria underpin the prices of oil.



In a widely expected move, the Fed on Wednesday kept its benchmark interest rate steady at 2 % and warned that upside risks to inflation have increased.



At a meeting of oil producers and consumers on Sunday, Saudi Arabia said it would raise its daily production by 200,000 barrels in July, in addition to the increase of 300,000 barrels a day which had been announced in May. This would make the total production from the country 9.7 million barrels a day.



But frequent militant attacks on Nigerian oil facilities continue to pose threats to supply from the oil-rich Niger Delta.



The oil cartel OPEC in its latest monthly oil market report had cut its estimate for 2008 global oil demand to an increase of 1.1 million barrels a day, from an increase of 1.17 million barrels projected earlier. The total global oil consumption was revised to 86.88 million barrels a day from the previous estimate of 86.95 million barrels a day.



Earlier, the International Energy Agency had lowered its forecast for average global oil product demand in 2008 to 86.8 million barrels a day, down 80,000 barrels a day from its previous estimate.



According to the latest energy-outlook report from the US Energy Information Administration, global oil consumption was up a lower than expected 630,000 barrels per day during the first quarter of 2008 compared with year-ago levels, against the expected growth by 1 million barrels a day.



Potential supply threats due to geo-political tensions and the Atlantic hurricane season also continue to underpin oil prices.



The Atlantic hurricane season officially began on June 1st. Arthur, the first Atlantic storm of the season had forced the closure of two export terminals in Mexico early this month, before weakening to a tropical depression creating heavy rains in the Gulf of Mexico.



Weekly Outlook (Crude oil NYMEX)



Continuation of uptrend expected above $140. Resistances $144.40, $149.70, $154.80; supports $138.00, $132.00, $127.60.



DWTI (July) traded in the range $139.15 - $142.91 and closed at $140.21 ($139.64).




TECHNICAL OUTLOOK (Intra-day)

DGCXCrude (July) - Bullish above 140.85; bearish below 140.30

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